Camera IconCliffs announced in March it would end mining at Koolyanobbing and would make its last shipment of ore from the end of June. Credit: Supplied

WA Mines and Petroleum Minister Bill Johnston says Mineral Resources’ acquisition of the Koolyanobbing iron ore mine in the Yilgarn is good news for WA and a good outcome for Esperance.

The Chris Ellison-led company this morning confirmed overnight news that it had secured a deal with US miner Cleveland-Cliffs to take over the mine 50km north of Southern Cross, saving hundreds of jobs, with the mine having been scheduled to close at the end of the month.

“This is good news for regional WA because we’ve been able to retain mining jobs in the Yilgarn, we’ve been able to retain jobs in the transport sector and most importantly from the Government’s point of view, we’ve been able to keep stevedoring jobs in Esperance,” Mr Johnston said, speaking on the sidelines of the Association of Mining and Exploration Companies annual conference in Perth.

He said the Government had not been directly involved in the commercial negotiations but whichever party had secured the deal with Cliffs, the other interested party being Macarthur Minerals, would have received the same support from the Government.

“The successful bidders are tough negotiators and they had an extensive list of demands and some of their demands we were able to accommodate and some we weren’t, but the good news is that the Government of WA has been able to support the commercial decisions of the parties to come up with this transaction and we were very happy to be proactive in getting a deal done,” he said.

MinRes did not reveal the acquisition price for the asset, which includes the mine, its resources and infrastructure as well as fixed infrastructure assets at the Esperance port.

The deal also includes an agreement with Arc Infrastructure to provide rail access for MinRes to use the existing track between the mine and the port of Esperance.

It is understood the deal will save the jobs of 120 port workers at Esperance and hundreds more at MinRes’ Carina mine, which is scheduled to close later this year, and the Koolyanobbing mine, where Cliffs has ended mining operations with the last load of iron ore scheduled to leave this month.

Mr Ellison thanked all parties involved in the transaction, which he said delivered a win-win outcome for all parties involved.

“Cliffs achieves a clean exit from Australia on economic terms that are more favourable than if they were to have simply shut down the Koolyanobbing operation,” he said.

“The remaining iron ore left on the Cliffs tenements will be extracted and sold to create ongoing economic activity and benefit for WA.

“MinRes will continue sending tonnes down the rail to Esperance and by doing so continue to provide jobs for hundreds of West Australians for the next five to six years.”

Cliffs chairman, president and chief executive Lourenco Goncalves said the company was pleased to have reached agreement on a transaction that not only brought value to Cliffs shareholders, but also represented the potential for continued job opportunities for WA employees who would be impacted by the pending closure of the Koolyanobbing complex.

Cliffs announced in March it would end mining at Koolyanobbing and would make its last shipment of ore from the end of June after accepting big discounts on its low-grade ore.

WestBusiness revealed in May the State Government was working to help secure a buyer for Koolyanobbing and posited MinRes as an obvious buyer given its existing mining operating in the Yilgarn at Carina, and the Government’s decision late last year to refuse its application to continue mining at the nearby Helena Aurora range because of its environmental significance.

While the company has a $280 million all-scrip deal in place with the junior miner’s board, Andrew Forrest’s Fortescue Metals Group and Gina Rinehart’s Hancock Prospecting have since emerged with 19 per cent stakes in the company, throwing its takeover plans into doubt.

Cleveland-Cliffs’ Australian business unit’s financial accounts show it swung from a $100.9 million profit in 2016 to an $11.8 million loss last year as widening discounts for its lower-grade ore bit into its revenue along with a $14.9 million impairment on the value of the Koolyanobbing assets.

The miner’s revenue in Australia fell by more than $132 million as the discount continued to grow towards the end of 2017.